P Venkat Rao, 46, a resident of Dantelaboru village in Bhadradri Kothagudem district, Telangana, started cotton farming after Class XII. The work was fraught with challenges. The yield was poor. The crop would get infected every now and then. The income was just enough to pay for basic needs of his family. His life changed when he saw a neighbour, Ramana, turn his cotton farm into a eucalyptus plantation and supply to ITC. In 2005, he did likewise, with ITC supporting him with knowledge of eucalyptus farming, soil testing and fast-growing clonal saplings. When he harvested the crop four years later, he earned ₹3 lakh. The second harvest, in 2013, got him ₹18 lakh. There has been no looking back after that. “I own five tractors that I give on rent,” he says. His income is now ₹ 7,000 a day, from ₹ 500 a day in 2005. He works with ITC as part of the company’s forestry programme which helps marginal farmers grow eucalyptus that is used to make high-quality pulp for its paper business.
Companies across sectors are redefining their raison d'etre or ‘reason for being.’ While revenue and growth milestones are still an integral part of their existence, more and more of them are linking their corporate strategy with goals driven by higher purpose – be it targets on livelihoods impacted, diversity, inclusion or sustainability, and making leaders accountable for meeting these goals. “Companies can no longer look at brand purpose as an advertising campaign that will be soon forgotten. It has to be a better way of doing things that is integrated in all facets of the business,” says Namrata Rana, Director-Strategy and Brand at sustainable experience transformation agency Futurescape.
Taking care of greater good also makes business sense. In 2019, FMCG major Unilever said its purpose-led brands (that have an environmental or social purpose) were growing 69 per cent faster than the rest of its businesses and accounting for 75 per cent of the company’s growth.
There are indirect benefits too. Purpose-led firms are also able to better attract and retain talent. A 2016 global study by PwC, Putting Purpose to Work, found that millennials are more than 5.3 times likely to stay with a company if they have a strong connection with its purpose. “Early to mid-level managers, not just in India but worldwide, are asking questions about what the company stands for and how its activities impact society,” says Rana.
The trend has accelerated after the pandemic, which has increased awareness about healthy living and conscious consumption. A study of 2,000 respondents in India by Futurescape found that 65 per cent consumers want to buy from companies perceived to be more responsible towards environment and social issues.
Income inequality and climate change have triggered widespread criticism of capitalist paradigms across the world. Companies today are expected to safeguard interests of all stakeholders in the value chain and not just equity holders. The other groups include customers, employees, suppliers/vendors and surrounding communities.
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